INSUBCONTINENT EXCLUSIVE:
stronger as the day progressed
After a tentative and modestly positive start, the market saw an across-the-board rally and ended the day on a strong note.
The benchmark
Nifty50 ended the day with robust gain of 220.85 points, or 2.20 per cent
As it had happened in the past, Nifty has once again attempted to mark a bottom, but is yet to confirm it
For this to happen, it would be critically important for the market to stay above the 10,200 mark and subsequently move past the
10,400-10,410 zone to confirm the base for the immediate short term.
While we expect a positive start to trade on Tuesday, the 10,310 and
10,365 levels will act as immediate resistance
Support exists at 10,200 and 10,150 levels.
The Relative Strength Index or RSI on the daily chart stood at 39.7403 and it remains neutral
showing no divergence against price
The daily MACD has shown a positive crossover and it is now bullish as it trades above the signal line.
A big white candle that emerged when
the market was oversold can be considered as the first sign of a potential bottom.
Having said that, as mentioned earlier, it would be
important for the market to stay above the 10,250 mark
The 10,180-10,250 zone was a key support as the market breached on the downside and this was expected to act as a key resistance
While remaining above this, Nifty is expected to witness a technical rally extending up to 10,400-10,410 zone.
These levels are not only the
important pattern resistance, but the 20-DMA also exists there
All in all, the market is likely to continue exhibiting tentative mood until the 10,400-10,410 zone is breached in a convincing manner
We recommend maintaining a cautious approach while also making limited purchases in select stocks and sectors
Profits should be protected with each up move until the present potential base formation is confirmed.
STOCKS TO WATCH:Short covering was
seen in stocks like Adani Power, ITC, Union Bank, Ashok Leyland, CESC, Axis Bank, State Bank of India, Reliance, South Bank, Jain
Irrigation, Tata Motor DVR, MM, Federal Bank and NMDC.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity
Research Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
